MOBILE – The Mobile City Council voted to allow Arc Terminals to build asphalt storage tanks, but struck down the company’s application to allow sulfuric acid storage tanks.

The decisions came Tuesday during the regular City Council meeting after delays on two appeals by residents to reverse previous Planning Commission approval of the projects. The council previously delayed votes on the issue to allow Arc officials the chance to answer questions about the projects at a public meeting, which was held on Aug. 6.

The Council voted unanimously to reverse Planning Commission approval to allow Arc Terminals, through an application made by Mobile engineering firm Cowles, Murphy, Glover and Associates, to store sulfuric acid in up to eight tanks previously approved for petroleum storage.

Councilors seemed to be split on the issue of reversing the approval, until they learned that Arc Terminals had since February been storing sulfuric acid inside at least one of the tanks in question.

After learning this information for what he said was the first time, Councilman Levon Manzie, whose district includes Arc Terminals, called the process “grossly unacceptable.”

“You’ve made everyone aware of this except us and the community,” Manzie said. “We’re cleaning up where they messed up.”

When asked about the oversight by reporters after the meeting, Clayton Curtis, Arc vice president of Regulatory Affairs, said they weren’t initially aware Planning Commission approval was needed for the project. When their client went to apply for a business license with the city, Curtis said, they were made aware of the error.

Curtis told reporters the oversight was mentioned to the Planning Commission before the body approved the tank for sulfuric acid storage. Those statements were called into question when just moments before the vote, city Planner Bert Hoffman was asked by Councilman John Williams if the Planning Commission had knowledge of the tank being used for acid storage prior to being approved. Hoffman said he “did not recall” hearing that acid was already being stored in the tanks.

Williams told the audience he was going to say he’d heard nothing to convince him to uphold the appeal, but with the new information, he’d changed his mind.

The council voted 5-2 to uphold the Planning Commission’s approval to allow Arc Terminals and applicant Cowles, Murphy, Glover and Associates to build three 10,000-barrel storage tanks for asphalt, where they originally had approval for a single 80,000-barrel tank. Councilwoman Bess Rich and Manzie voted against the measure.

Manzie said Arc not telling the council of its oversight with the storage of sulfuric acid until minutes before a vote further convinced him to reverse approval of the new tanks.

“I’m not convinced this is in the best interest of our city,” Manzie said. “Considering what we just learned, what … support I might have had for this has been eroded.”

Williams told councilors not to judge Arc on its previous oversight. He reminded them that the application for the new asphalt tanks would result in new technology and a smaller facility overall.

The application does represent around a 50,000-barrel reduction in asphalt storage, because Arc is already approved for an 80,000-barrel storage tank.

Councilman C.J. Small agreed, saying either way Arc was going to be able to “go upstairs” after the meeting and get a permit for a storage tank.

Councilman Joel Daves argued that Mobile began as a port city and its growth has been at the port. He said if the Council starts denying every new port project it would begin to affect “hundreds” of jobs.

Curtis told councilors the asphalt would be used by Alabama-based contractors and the local community would be consumers of it. He said the new tanks would employ about six workers.

In previous meetings, the number of residents allowed to speak for or against each appeal was unlimited. Tuesday the council allowed only six speakers total on both issues.

Despite the public meeting, Brenda Bolton asked councilors to further delay a decision on both applications because there were still unanswered questions as to the amount of insurance coverage Arc had in the event of an accident.

Bolton said according to the company’s Securities and Exchange Commission filings, they weren’t fully insured for all risks and would not be able to obtain the insurance they desired at a reasonable cost.

“I don’t think we need to add much to that,” Bolton told councilors.
Local attorney and DeTonti Square resident Pete Burns also questioned Arc’s level of insurance coverage and whether the insurance excluded “acts of God,” like lightning, hurricanes and tornados.

Curtis shared with councilors the company’s insurance certificate and told them Arc is insured for $25 million.

After Rich asked about exclusions included in Arc’s insurance, Curtis told councilors the insurance doesn’t exclude so-called “acts of God.” In his experience, he said, he had never seen the policy fail to cover issues caused by a hurricane. As for lightning, the tanks are grounded and well protected, he said.

In other business, the Council unanimously approved the fiscal year 2016 capital improvement plan (see page 12 for more information). Councilors called it “historic” and Mayor Sandy Stimpson said during his comments that it represented the most “transformative” legislation he’s been involved in since taking office.

The council also voted to approve an amendment to an ordinance to further define the role of the presiding municipal judge and to give Mayor Stimpson sole authority to promote a municipal judge to presiding judge.

In the interest of full disclosure, the author of this story is related by marriage to Gary Cowles, a partner in Cowles, Murphy Glover and Associates.